Pharma giant Regeneron buys DNA database of 23andMe in bankruptcy

The DNA testing firm 23andMe has been sold off in a bankruptcy auction. Once a high-flying company backed by top investment funds whose shares popped after the IPO, 23andMe will be bought for only $256 million, 96% off its market valuation four years ago.

Regeneron Pharmaceuticals will acquire the customer database of 23andMe as part of a bankruptcy asset sale, according to a joint statement released yesterday, May 19. The deal is valued at $256 million, a 96% loss versus the $6 billion market capitalization 23andMe reached at its peak in 2021.

Under the terms of the agreement, Regeneron will acquire all of 23andMe’s units, except for its telehealth service Lemonaid Health, which is planned to be shut down. Following the close of the deal in the third quarter, 23andMe will continue operating as a subsidiary of Regeneron.

Regeneron pledged to comply with 23andMe’s privacy policy and laws governing the use of customer data. It mostly wants to leverage 23andMe’s data to develop new treatments for serious diseases. Regeneron stated its willingness to provide a court-appointed ombudsman with detailed information on how it intends to use the data.

According to court documents, the second-highest bid — $146 million — came from a nonprofit research institute founded by 23andMe’s former CEO and cofounder Anne Wojcicki.

23andMe is a California-based biotech that offered DNA testing kits enabling users to learn about their ancestry and health risks. Over 19 years, the company built a database of genetic data from 15 million customers. However, the business took a major hit in 2023 after a massive data breach exposed the genetic information of 7 million users. 23andMe proved unable to recover from the subsequent drop in demand and filed for bankruptcy in March of this year.

The bankruptcy proceedings drew intense scrutiny from lawmakers, who warned that the genetic data of millions of customers could be sold to unscrupulous buyers. Last month, 23andMe agreed to allow a court-appointed overseer to take charge of its data handling and compliance during the bankruptcy.

Multiple parties expressed interest in buying the business, including Wojcicki, who had 49% of the voting shares. She expressed disappointment in a post on X over the board’s rejection of her previous offers, where she valued 23andMe at about $11 million.

After 23andMe filed for bankruptcy, the stock was delisted from the Nasdaq and commenced trading over the counter. On Monday, it soared 200% to $2.70 per share, still around 70% below its IPO price on the Nasdaq in 2021.